Initial US jobless claims unexpectedly increase

WASHINGTON  The number of newly laid-off workers seeking jobless benefits unexpectedly rose last week, as the economy recovers at a slow and uneven pace.

Layoffs have slowed and the economy began to grow in last year's third quarter, but companies are reluctant to hire new workers. The unemployment rate is 10 percent and many economists expect it to increase in the coming months.

The Labor Department said Thursday that initial claims for unemployment insurance rose by 36,000 to a seasonally adjusted 482,000. Wall Street economists expected a small drop, according to Thomson Reuters.

The four-week average, which smooths fluctuations, rose for the first time since August, to 448,250.

The weekly claims figure is volatile and it can take time for trends to emerge. A Labor Department analyst said that much of the increase last week was due to administrative backlogs leftover from the winter holidays in the state agencies that process the claims.

Claims have dropped steadily since last fall, as companies cut fewer jobs. That has caused some economists to hope that hiring may increase soon. Initial claims have dropped by 50,000, or almost 10 percent, since late October.

Still, the economy is not consistently generating net increases in jobs. The Labor Department said earlier this month that employers cut 85,000 jobs in December, after adding only 4,000 in November. November's increase was the first in nearly two years.

Many economists say the four-week average of claims will need to fall to below 425,000 to signal that the economy is close to generating net job gains.

Meanwhile, the number of people continuing to claim regular benefits dropped slightly to just under 4.6 million. The continuing claims data lags initial claims by a week.

But the so-called continuing claims do not include millions of people who have used up the regular 26 weeks of benefits customarily provided by states and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

More than 5.9 million were receiving extended benefits in the week ending Jan. 2, the latest data available, an increase of more than 600,000 from the previous week. The data for emergency benefits lags initial claims by two weeks.

The increasing number of people claiming extended unemployment insurance indicates that even as layoffs are declining, hiring hasn't picked up. That leaves people out of work for longer and longer periods of time.

Among the states, California saw the largest increase in claims, with 16,160. Texas, Florida, Pennsylvania and Georgia saw the next largest increases. The state data lags the initial claims data by a week.

Oregon saw the biggest drop in claims, of 5,784, followed by Iowa, Kentucky, Michigan and Massachusetts.